Amazon, Flipkart find success in rural India during sales season

Bloomberg Bangalore | Updated on October 07, 2019

Representative image.

The festive sales of both e-commerce companies ran on the same days and concluded over the weekend. Inc and rival Walmart Inc reported record revenue for their six-day India festival sales as e-commerce catches on with buyers and sellers in smaller Indian towns, moving beyond the country’s urban, English-speaking population.

The American competitors have been duelling in India since Walmart cut a $16 billion deal for control of local pioneer Flipkart Online Services Pvt last year.

Also read: E-tailers set to notch up volumes of $3.7 billion this festive season

Their latest sales — which Amazon calls the ‘Great Indian Festival’ and Flipkart calls the ‘Big Billion Days’ — are a high-stakes battle, that ran on the same days and concluded over the weekend.

Bharat in focus

Both focused on expanding their online commerce to smaller cities and rural areas, an enormous swath of the country known by its historic name of ‘Bharat’. Neither company gave specific revenue figures, though they claimed record activity. “This has been our biggest celebration ever, a digital Bharat festival,” said Amit Agarwal, Amazon’s India chief, during a telephone call from his Bangalore headquarters. Over 65,000 sellers from 500 cities sold products.

Millions of Indians are moving online thanks to inexpensive smartphones and some of the lowest mobile data rates in the world. That is boosting all kinds of internet businesses, from streaming video and online gaming to e-commerce and services.

Also read: Festival bonanza: It’s raining deals as companies go all out to woo buyers

“There is a big wave of consumers in Bharat shifting their offline spending to online during these sale days, and increasing the ticket size of their purchases,” said Satish Meena, a senior forecast analyst at Forrester Research Inc.

Online retailers have been efficiently getting their message about the discounts, the product assortment and affordable credit offerings to the internet users in small cities.

‘Huge opportunity’

Flipkart said in a note that it recorded almost 50 per cent growth in new customers compared with last year’s sale days, and a 100 per cent increase in units sold to shoppers in Tier-III cities.

More than 40 per cent of sellers during the sale days were from Tier-II cities and beyond. “Bharat has moved closer to India in more ways than one,” Kalyan Krishnamurthy, Flipkart’s chief executive officer, said in a statement.

Also read: Smartphone sales: Online to surpass offline in Oct-Dec quarter

Agarwal said Amazon succeeded in attracting not just buyers but also small and medium sellers hawking local brands. Among the top-selling brands were Ganesh vegetable choppers, local makers of treadmills and Boat, which makes earphones and other mobile accessories.

“A huge opportunity lies ahead as this sale event demonstrates,” Agarwal said. “Its a long journey, and we are taking a 10-year-view as India will have the largest internet population in the world.”

Published on October 07, 2019

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